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(CPG) are products that are sold

quickly at relatively low cost. c


 alternatively called as CPG (Consumer packaged

goods) industry primarily deals with the production, distribution and marketing of consumer
packaged goods. The Fast Moving Consumer Goods (FMCG) are those consumables which are
normally consumed by the consumers at a regular interval.J

Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc.
The industry also engaged in operations, supply chain, production and general managemet.

c

 provides a wide range of consumables and accordingly the amount of money
circulated against FMCG products is also very high. 
 
  
   

      


 
   

    

  
  
     Though the absolute profit made on FMCG products

is relatively small, they generally sell in large quantities, so the cumulative profit on such products can

be large.


The competition among FMCG manufacturers is also growing and as a result of this, investment
in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as
the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is
estimated to grow 60% by 2010.

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Some common FMCG product categories include food and dairy products, glassware, paper
products, pharmaceuticals, consumer electronics, packaged food products, plastic goods,
printing

and stationery, household products, photography, drinks etc. and some of the examples of
FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and
cigarettes, watches, soaps etc.
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Some of the merits of FMCG industry, which made this industry as a potential one are low
operational cost, strong distribution networks, presence of renowned FMCG companies.
Population growth is another factor which is responsible behind the success of this industry

a

The term FMCG refers to those retail goods that are generally replaced or fully used up over a
short period of days, weeks, or months, and within one year. This contrasts with durable goods or
major appliances such as kitchen appliances, which are generally replaced over a period of
several years.

FMCGs have a short shelf life, either as a result of high consumer demand or because the
product deteriorates rapidly.

Some FMCGs ± such as meat, fruits and vegetables, dairy products and baked goods ± are highly
perishable.

Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products
have high turnover rates.

The following are the typical characteristics of FMCGs:[1]

From the consumers' perspective:
Y Frequent purchase
Y ·ow involvement (little or no effort to choose the item -- products with strong brand
loyalty are exceptions to this rule)
Y ·ow price
Y ºasy availability
Y Îide variety

From the marketing and distribution angle:
Y åigh volumes
Y ·ow margins
Y ºxtensive distribution networks
Y åigh stock turnover

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Management practices in fmcg companies:

1. ast distribution network management

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For example:

HUL is the market leader in Indian consumer products with presence in over 20 consumer
categories such as soaps, tea, detergents and shampoos amongst others with over 700 million
Indian consumers using its products. Sixteen of HUL¶s brands featured in the ACNielsen Brand
Equity list of 100 Most Trusted Brands Annual Survey (2008).[3] According to Brand Equity,
HUL has the largest number of brands in the Most Trusted Brands List. It has consistently had
the largest number of brands in the Top 50, and in the Top 10 (with 4 brands).

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.

With such a vast network it is the leading fmcg company of india. We can easily find its products
in any general grocery store.

Taking note of indian psyche companies like hul and itc introduces small sachets of their
products so that they are in the budget of rural population and moreover allow them penetration
in rural areas.

Supply chain management practices

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The actual production and distribution of Coca-Cola follows a franchising model. The Coca-Cola
Company only produces a syrup concentrate, which it sells to bottlers throughout the world, who
hold Coca-Cola franchises for one or more geographical areas. The bottlers produce the final
drink by mixing the syrup with filtered water and sweeteners, and then carbonate it before
putting it in cans and bottles, which the bottlers then sell and distribute to retail stores, vending
machines, restaurants and food service distributors.[41]

The Coca-Cola Company owns minority shares in some of its largest franchises, like Coca-Cola
Enterprises, Coca-Cola Amatil, Coca-Cola Hellenic Bottling Company (CCHBC) and Coca-Cola
FEMSA, but fully independent bottlers produce almost half of the volume sold in the world.
Independent bottlers are allowed to sweeten the drink according to local tastes.[42]

MARKETING PRACTICES

Strong branding

            

   
  
 
   
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Unilever is committed to diversity in the work environment where there is mutual trust and
respect and where everyone feels responsible for the performance and reputation of the company.
We recruit, employ and promote employees on the sole basis of the qualifications and abilities
needed for the work that needs to be performed. Unilever¶s policy is to provide Equal
Employment Opportunity to qualified individuals for employment and/or advancement in
accordance with applicable federal, state, and local law and regulations.

RB has a very fast-paced and challenging working culture and likes to portray a truly global
outlook by placing management staff out of their 'comfort zones'. For example, a German
manager wouldn't necessarily be left to work in Germany; they may be posted in Brazil for two
years, followed by India for the next role. This allows employees to have an international focus.
The company runs a number of graduate programmes,[20] in most of its markets, with over 200
graduates joining the schemes worldwide. Once hired, graduates tend to work for a couple of
years as a trainee in the country in which they were originally employed, followed by a posting
overseas for those who have excelled during initial training. Graduate trainees start off in one of
the firm's business areas: Marketing & Sales; Supply Chain; Research & Development and
Information Systems.

The European Graduate Programme,[21] for example, starts with a placement on the sales team of
a country where the candidate can speak the local language. After a year, the graduate is moved
to another European country for their marketing assignment.

As part of its recruitment initiative, RB launched a blog, myRBopportunity, which features blog
posts and commentary from graduates who have recently joined the company. The blog also
features guest bloggers such as RB CEO Bart Becht and other senior management or industry
experts.

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ITC Echoupal creatively leverages information technology to set up a meta-market in favour of

India's small and poor farmers, who would otherwise continue to operate and transact in 'un-
evolved' markets

Reckitt Benckiser has implemented an environmental initiative called Carbon 20.[31] The
initiative, which was announced in November 2007, aims to cut the total carbon footprint of its
products - from creation to disposal - by 20% by 2020. As part of the initiative the company has
reduced by 70% the amount of plastic in the packaging of its 
 cleaner In June 2006,
Reckitt Benckiser launched Trees for Change, a major forestation project designed to offset the
greenhouse gasses created as a by-product of its manufacturing processes

In 2001, the company embarked on a programme called Shakti, through which it creates micro-
enterprises for rural women. Shakti also includes health and hygiene education through the
Shakti ani Programme..